Why Privilege Makes You Soft

FIRECracker is Canada's youngest retiree. She used to live in one of the most expensive cities in Canada, but instead of drowning in debt, she rejected home ownership. What resulted was a 7-figure portfolio, which has allowed her and her husband to retire at 31 and travel the world. Their story has been featured on CBC, the Huffington Post, CNBC, BNN, Business Insider, and Yahoo Finance. To date, it is the most shared story in CBC history and their viral video on CBC's On the Money has garnered 4.5 Million views.

I’ve heard these excuses, over and over, again. And every time, I roll my eyes .

People who give these types of lame excuses usually come from a place of privilege. Because privilege gives you the luxury to choose what you want or don’t want to do. When you don’t have that privilege, you have no choice but to do the math, live life within your means, and lower your standard of living.

But guess what? I don’t envy people with privilege. Because even though privilege can help you get ahead, it can also be a handicap.

Yup, that’s right. I’m just going to come out and say it “privilege makes you soft.”

And let me be clear, the type of privilege I’m talking about here is financial privilege. Those who’ve never had to worry about money.

Now, those who have been following the Millennial Revolution for some time know that I never saw my upbringing as a handicap. Instead, growing up poor is the reason why I’m where I am today.

By developing creativity, resilience, adaptability, and perseverance, I was to able to use those skills to retire decades before everyone else—even people who grew up rich.

Which is why I’ve never envied privileged people. Because in my eyes, privilege is a weakness, not a strength. Privilege makes people soft.

Now, there are many of you who would probably disagree. You see privilege as a winning lottery ticket that propels you ahead of everyone else. But just like majority of lottery winners, privileged people quickly lose their windfall because they never learned how to keep it. That’s why there’s a saying that “wealth only lasts 3 generations”. Statistics show that 90% of wealthy families lose their wealth by the 3rd generation. This is because the first generation started with nothing, so they had to work their butts off to earn their wealth. This generation quickly learned how to keep it because every dollar they earned came from their own blood, sweat and tears.

The second generation, having seen their parents sweat it out and work for their money, ended up learning how to manage their finances and not squander it because they saw how much hard work it took to become wealthy.

The 3rd generation, however, is the generation who destroys it all. By growing up privileged and being handed a butt-load of money, the 3rd generation end up too soft. They never learn how to work hard and handle their finances, so they promptly squander it.

Why does this happen? I believe growing up privileged causes the following mistakes to be made:

Not Learning How to Manage Finances

When you grow up rich, every time you make a mistake and spend too much, it’s no big deal. Your parents will just bail you out. As a result, you never learn how to optimize and plan out your finances. You simply make mistakes, and since there are no consequences, you can just keep making the same mistake over and over again. Not appreciation your resources causes you to never learn how to manage them. As a result, you end up wasting your resources as an adult and running out when the safety net is removed.

But when you grow up poor, you have limited resources. Which means you HAVE to plan. Otherwise, you’d run out because there’s is no safety net. An example of this was my meals as a kid. Anytime I dropped food, I wouldn’t get a second helping. There’s no messing around when money was tight and food was scarce. My mom even went as far as making up a story about how eggs make your head explode, so I wouldn’t want to eat expensive eggs that we couldn’t afford. By valuing the food I put in my mouth, I learned not to waste resources. This ended up being a valuable skill because as an adult I learned how to make budgets as efficient as possible.

Getting A Degree with Bad ROI

Having the luxury to choose whatever degree you want is a curse instead of a blessing. By following a road that has no obstacles and is fun and easy, privileged people end up screwing themselves over. By picking a “fun” degree rather then a useful one and racking up a ton of debt, privileged people all too often end up finding that later down the road, not only are they not getting a return on their investment, they’re going to have to spend years paying off that debt.

But as a poor person, you end up being very cautious when picking a degree. You don’t get to pick a fun and easy degree because your parents can’t afford to bail you out. So you end up having the constraint of picking a practical degree. Sure, it’s might be as fun as sliding down banister made of razor blades, but when you out-earn all your peers who had the luxury of picking the “fun and easy” degree, you realize it was all worth it.

Inability to Handle the Slightest Discomfort

When you grow up privileged you don’t have to be adaptable, because your parents always had money to throw at your problems. Don’t like Brussel’s spouts? That’s okay. The nanny will just make something else. Don’t like your school? No problem. Your parents will just transfer you to nicer, fancier private school.

As a result, later on in life, you can’t handle even the slightest discomfort. “What do you mean you don’t have Stevia? I can’t drink my low-fat soy macchiato without Stevia!” “Oh I can’t take public transportation! EW, what will people think?” or “This bed doesn’t have one thousand thread count sheets?! What the hell!”

But for people who grew up poor, we learned how to tough it out, how to adapt, and how to evolve. Discomfort doesn’t bother us at all. All we care about is achieving our goal, whether it is travelling the world, becoming financially independent, or living a fulfilling life. All those petty little things mean nothing.

Constantly Needing to Have Your Feelings Validated

When you grow up privileged, everyone around you actually gives a SHIT about your feelings. When you’re not happy or stressed you tell your parents, nanny, or teachers and they immediately respond by validating it and trying to help you “feel better”.

While this might sound great, it actually has the tendency to cause problems down the road. Because constantly having your feelings validated means that as an adult, you expect everyone around you to stop what they’re doing and deal with your feelings. This can be extremely annoying to everyone around you and can hold you back from actually getting shit done.

For those of us who grew up poor, having people validate our feelings is a luxury we couldn’t afford. Our parents never had have time to give a rats ass about our feelings. They definitely didn’t have time to drop everything to help us “feel better”. In fact, whining about your feelings usually results in them rolling their eyes, telling you how good you have it, and then rushing off to their second job. As a result, we learned how to adapt to our situation, suck it up and solve our own problems. Feelings don’t matter. Results do. Which actually becomes extremely helpful later on, because while our friends and classmates are all sitting there whining about what someone said which hurt their feelings and why oh why does the world have to be so cruel, us poor kids are working our butts off and zooming past them. We don’t let feelings derail us. Because when it comes to accomplishing our goals, feelings don’t matter.

For example, in engineering school, I was constantly on the verge of an emotional and mental meltdown. But I knew talking about my feelings wasn’t going to help me graduate, so regardless of how sick or stressed I was, I persevered. One time I caught strep throat during exams, which kept me from sleeping for two weeks straight. The only way I could stay awake to study was to chug an UNGODLY amount of Buckley’s cough syrup. If you’ve never had that stuff before, it basically tastes like spoiled poo. I ended up downing an entire bottle during my two hour exam because the horrible taste was the only thing keeping me awake. I ended up JUST barely passing that exam, but I never let my stress and the anxiety derail me. In engineering, nobody gives a crap about your feelings. You either find a way through or you fail.

And that’s how I was able to get to where I am today. Because I never had the luxury of having my feelings hold me back.

As a result of these handicaps, privileged kids grow up all pampered and coddled. So what happens if something goes wrong and their parents, friends, or the government aren’t there to save them? They’re screwed.

Whereas kids who grew up with nobody to rely on but ourselves can whether even the toughest storms. We had to solve our own problems. We had to save ourselves. As a result, we learned how to be independent and not have to rely on our parents, banks, or governments to bail us out.

So the next time someone says “they are accustomed to a certain lifestyle” or they look down at you for “living such a deprived life”, just remember:

Privilege makes them soft. And by being soft, they leave the door wide open for you to kick their ass and retire DECADES earlier. Then you will be the one living a life of freedom and fulfillment while they continue bleeding money and remain trapped in their corporate prisons.

So they can complain about their entitled life as much as they want. But we all know that’s just code for “I’m soft.”

And I don’t know about you, but when shit hits the fan I’d much rather be a badass than soft and dependent. Because I’ve learned to be adaptable and take care of myself, while all the “softies” can do is complain and wait for other people to rescue them.

What do you think? Does privilege make you soft?

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102 thoughts on “Why Privilege Makes You Soft”

“For example, in engineering school, I was constantly on the verge of an emotional and mental meltdown. But I knew talking about my feelings wasn’t going to help me graduate, so regardless of how sick or stressed I was, I persevered.”

You’re lucky. I had a friend like that in university. They tried to ‘tough it out’ and didn’t talk to anyone. Notice the past tense? Funerals are awful. Funerals due to suicide are indescribable.

Feelings matter. Mental health matters. All the money in the world doesn’t do any good if you’re miserable from decades of repressed depression. I’m glad you made it through, but I don’t think people should be mocked/shamed/whatever if they need some help. I visited the campus shrink a few times while I was at school, and it absolutely helped me graduate.

I’m so sorry to hear about your friend. I’m no stranger to depression since I had gone through it before and had to be put on meds. And yes I was lucky in that when I couldn’t handle it I reached out to medical professionals. So I see where you are coming from. I wish your friend had gotten the help he needed.

I agree, privilege does make you soft. Many people have a big wake-up call when they are in their early 20’s. I’m looking to buck the trend and start something big myself. In 2017, I’m reading 75 books to ensure my personal development is in line with my goals, and I’m starting a company as well.

It’s true that privilege makes you soft in certain areas. Growing up in a lower middle class family that prized hard work above all else, I saw it both in the people who had more than me and in myself when compared to those less fortunate than me. However, though I do believe there are great benefits to being a tough, adaptable survivor, especially when times get tough, I believe the ultimate goal in life is to have happiness and contentment. I think that can be achieved at any privilege and softness level; it just takes the right perspective.

Perspective is definitely the key. A rich person without perspective can squander it all, whereas a poor person with perspective can rise above their poverty. If I didn’t have the perspective of living in a much poorer country, I wouldn’t developed the grit I needed to get to where I am.

Yes, I agree that privilege makes one soft. But the tone of the article here will only antagonize the naysayers as it comes with a sense of “I know best”.

I have grown up amazingly privileged — from skin color to financial situation to educational opportunities — but am only on track for a firecracker-like situation through hard work that stemmed from complexes of “imposter syndrome” and wondering if I’d simply just fail.

Not the best motivation, but there could be healthier alternatives such as parents that provide both opportunity and force their children to learn to deal with reality on their own.

While I came from a very privileged and well-off background, I ended up in a similar spot with similar values. The way I ended up there was not particularly healthy. I’d argue that poverty as a forcing function is also not ideal, even if effective.

I believe that strong parenting values could get the same results we have both achieved with less emotional trauma, but rarely see it.

The other part is about tone. I actually appreciate how the blog is written, and that’s why I’m here. I tend to agree even with the sentiments in addition to the content. However, it can make it more difficult for non-FIRE people to be understanding of the movement if the members/leaders are perceived as “finger-wagging”.

If you live your life trying to make everyone happy (which is a pointless and impossible goal), you will waste your life. People who dismiss movements because it’s not EXACTLY representative of their situation or get defensive tend not to change or be curious anyway, so trying to cater to them is a waste of time.

This resonated with me. I was born in America, but the rest of my family were immigrants from a developing country. My parents are also the uneducated kind–my mom is still illiterate and has never moved up from working factory jobs.

Where I live now (NYC), the financial privilege is rampant. I’d be lying if I said I never get down about not catching a break sometimes. Examples:
-I have to save up for a house downpayment myself.
-I have to pay for my own wedding.
-If I decide to have a kid, I’ll have to fund his/her education myself.

All of this support that other people seem to get with no effort, I don’t get. Since we were 4 years old, my sister and I basically raised ourselves. And I have had to work like a dog for every single penny I have, although nowadays,I’ve figured out how to work smarter (investing ftw). I’m really proud of my accomplishments, but it would have been nice to know that there was money for me to go to the private college I wanted to go to, without incurring a ton of debt.

With that said, I don’t think there are blanket statements when it comes to privilege. I think there are some people who have help that are hardworking and learn good financial habits. I also think there are people who grew up poor but who still feel entitled. Everybody reacts differently to their money situation. I think one part of it is personality. For example, my sister and I grew up in the same house, with the same parents, and yet, the way we handle money couldn’t be more different.

And that’s why you’re stronger than they are and when shit hits the fan you’re the ant and they’re the grasshopper .

Personality does account for some differences of how people turn out, even if they have the same upbringing. That said, it’s a choice. You can choose to see your upbringing as an asset or hinderance and that perspective ultimately determines success or failure.

“For example, my sister and I grew up in the same house, with the same parents, and yet, the way we handle money couldn’t be more different.”

Same here. My sister felt deprived when we were growing so now that she is earning money, she just buys whatever she wants. She always has credit card debt and never bothered to pay full amount. I don’t even know if she is saving anything at all. I, on the other hand, felt the need to earn and save money because I do not want to be poor again.

Yes, I think it’s true that privilege makes us soft. Most of us who live in North America lead very privileged lives. We’re soft.

Many people won’t agree, but the vast majority of us couldn’t live a week without electricity, running water, cars, and stores to buy every convenience imaginable.

I’ve known people practically born into CEO positions. They can’t even understand life without those privileges. Are they successful financially? Definitely. Could they ever have made it on their own? Nope!

Personally, I think not having a safety net forces a person to grow-up and face reality. That can’t be a bad thing, despite not having a head start in life.

I do not think “Once you get out of North America, only then do you see how good we have it.” is an appropriate comment.

How can privilege be restricted to just North America when there are IMMENSLY wealthy Chinese kids spending their parents’ wealth without a care in the world on ridiculousy extravagant cars, houses and parties?

Are those in North America necessary luckier than those in other parts of the world? Sure, but not in all instances and that is not a blanket statement you can make. Your over generalization presents a very narrow minded picture.

Wow, so since there are rich people in other parts of the world, therefore those of us in North America aren’t lucky. Someone else is making it, therefore I’m going to wallow in my situation. Cleary coming from someone who’s never been out of North America.

Not sure if you read my comment fully but pasting it below for your convenience:

“Are those in North America necessary luckier than those in other parts of the world? Sure…”

Where do I say that those in NA are not lucky? Your MASSIVE over generalization of ASSUMING ALL North Americans are privileged is what I wanted to point out. There are people in NA who do not have access to the same resources you had (a loving and supporting family, etc.). I do not think it is appropriate for you to assume just because you’re from NA, you have a privileged life.

No one is wallowing in anything; I just take issue with your mass generalization that EVERYONE in NA is privileged when it’s clearly not the case.

Btw, I am a first generation immigrant (not born in Canada) with parents who have had to struggle to give me everything they could. Again, you seem to be making assumptions which are not necessarily based on anything solid.

“same resources you had (a loving and supporting family, etc.)” Really? Why would you assume that? My parents fought frequently when I was growing up and threatened divorce. My mother beat the crap out of me, locked me in a dark room, and constantly called me stupid and told me she wished I had never been born.

For someone who accuses me of generalizations, you seem to be making some generalizations of your own.

And yes NA has its problems (it’s far from perfect), and yes there are people in poverty, BUT if you compare it with other countries in the world where people are suffering from famine, war, political instability, those people would give anything to have our problems. It’s all about perspective.

That’s fair enough – that was a generalization / assumption on my part, which may not have been accurate.

I can certainly empathize with those comments as I also at times was subject to that (may be something how Asian and South Asian parents choose to raise their kids)…but it does make you tougher (no doubt about that).

I agree, it is all about perspective and acknowledging that each part of the globe has issues, including North America. It is not simply easy enough to say that just because one was raised in North America, one has had access to all the privileges in life. If you take a kid living in one of the lower income neighborhoods of the GTA and compare that to a kid with wealthy parents in Asia, there certainly would be a case of where privilege does not reside in NA.

Correct, I agree with you. It’s true that you can come to the conclusion whether you are privileged or not privileged depending on where in the world you are comparing yourself to. That said, seeing things in a positive light HELPS you take action to improve your situation. Seeing yourself as being screwed by life just because someone else is better off than you, does not. I choose the former. It’s up to each person to decide which perspective they choose.

Of course privilege makes you soft, but does it matter? I grew up around both trust fund kids and scrappy immigrants, and despite all their striving, hard work, and grit, the latter have had much less rewarding lives than the former. The poor kids (like myself) ended up in fields like law, medicine, and engineering because we generally had no choice. The rich kids pursued the arts and creative fields in nice apartments paid for by the bank of mom and dad. No, the heirs and heiresses didn’t end up on drugs, or depressed, and they didn’t burn through their money, either- they simply had more options and used them well for a better life and also to help their fellow humans. Now, I don’t know how their children will do, of course- perhaps they will have to have grit.

Privilege is only a problem if it’s taken away. If you are lucky enough to surround yourself with it your whole life, it’s great, better than I will ever know, and better than the life any self-made human will experience. I think people tell themselves that inherited wealth and privilege will inevitably make them soft, or that it leads to addiction and wasted lives so they aren’t completely overwhelmed by depression and jealousy.

Ultimately, it’s irrelevant, of course- the wealthy were born into their world and I into mine, and we each have to play the hand we were dealt. But if I could go back to the deck and draw again, of course I would choose wealth and privilege.

Exactly. And at any moment it can be taken away (as we’ve seen from Nick, the guy who’s Dad had maids and BWMs, then one day, poof, lost his job and it’s all gone). I rather live my life having EARNED what I have, and if it were taken away, I’d had the skills to build it all back up again.

I could go back to the deck and draw again, I wouldn’t change a thing. I’m not jealous at all of the people who got handouts, because happy people don’t care if other people have more. They are simply happy because they have enough.

If you have the attitude of constantly comparing yourself to other “luckier” people, even if you went back to the deck and drew again, you’d still wouldn’t be happy being rich, because then you’d look at even richer people and envy them.

Nice hypothesis, however I’d like to caution that you are merely a sample size of one. I am another data point that would appear to contradict your hypothesis, given that my less wealthy childhood friends ought to then be the savers and me the spendypants, rather than the reverse. Perhaps the stated cause has nothing to do with effect? Perhaps it’s, say, parenting style, not $$ that leads to the difference? Or birth order? Without sufficient quality data, it’s hard to say.

Parenting could have contributed, also culture. It’s never 100% black or white, but I know that if I had been given hand-outs, I never would’ve gotten to where I am today.

Not saying all rich people end up losing their money or all poor people end up developing grit, but just having the perspective of not throwing up your hands and saying “oh I’m poor and other people were born lucky, what’s the point?” makes all the difference.

So…just a thought…but perhaps what you really are saying isn’t that ‘being rich makes you soft’ and ‘being poor is the best way to learn grit’ but rather “living in a country where everyone else is just as rich or as poor as you are is the BEST environment for nurturing future success?”

I agree, on a slightly different track it’s something that can happen to those who start a business using finance.

If you take out a big loan or raise finance another way then it can cause people to become soft right at the start.

They may picture themselves as successful business people, but if you are just starting out all you really have is a load of debt.

You don’t need, say, the latest laptop and a car lease to start many businesses​ – if you really need to improve what equipment you start with, then that can come later from actual profits of the business down the line.

It’s much better to survive those early years on a tight budget and cash savings, that way you don’t become soft to the siren call of credit.

Being tough initially will also protect you from sharks who may promise great results if you give them lots of money. On a tight budget you have the defence of not having the funds until later… rather than building up loads of debt.

There can be somewhat of a disconnection between money and reality when it has come from finance.

When it is your own hard-earned cash, you will be much more wary of spending it.

“become soft to the siren call of credit.” “When it is your own hard-earned cash, you will be much more wary of spending it.”

Spot on, James! This is why investors on Shark Tank refuse to partner with entrepreneurs who don’t put their own money in the game. They know the person won’t work hard enough to make the business succeed.

Awesome post! I grew up lower middle class with zero frills. There was no allowance, no lessons, no camp, and once the lights were even turned off because the bill hadn’t been paid. Paid my own way through university with a scholarship and working 20 hours a week as a secretary or house cleaner or whatever all the way through school plus summers of course. But you know what? I appreciate it all. In my opinion one of the worst government trends of the last 50 years has been the drastic and gross increase in social services where so many people near the bottom have NO incentive to work or have fewer kids (that they can actually afford to raise), etc. I’m not talking about the truly indigent or those with mental disabilities (like my sister) who truly can’t work. I’m talking about everyone else just above them who can choose not to work because taxpayers subsidize them. We’re suckers and too sympathetic to the whiners. I respect my dad’s generation. No social services and if you didn’t get a damn job (any job) you might starve. Great people were produced out of those times. Just saying!

Now that I’m FI and within weeks of my first child, I’m especially interested in how to ensure my kiddo is not an entitled turd. Our strategy is something like: continue to live consciously; teach responsibility (financial, social, intellectual, etc.); expose kiddo to varied conditions; provide joy outdoors. Any other recommendations?

“I’m especially interested in how to ensure my kiddo is not an entitled turd.”

THANK YOU! The world needs more parents like you. If we end up having kids, this is what we strive for as well.

One thing I’ve heard from other people that seems to work well is this:

Whenever your kid wants something, when they’re old enough, they’ll need to work for 50% of the cost, and you cover the other 50%. That way they’re incentivized to put in the time to earn it.

I would also encourage them to be entrepreneurial, as well as donate to worthy causes (they can choose to donate time or money). That way they learn how to create value for the world rather than waiting for handouts.

There is nothing wrong with being privileged. You make it sound like it’s bad to be born into privilege. I think the main thing that determines whether or not someone gets their shit together financially is their attitude/mindset, not their socioeconomic background.

I actually fit into a lot of what you describe – I grew up privileged, went to private school, university was paid for by my parents(so I ended up with a general arts degree that I didn’t really use or have plans for), and I continue to receive the benefits of privilege today.

HOWEVER – while it’s true I did struggle with financial cluelessness/irresponsible spending during my early 20’s, I wasn’t bailed out by Mom & Dad. After struggling with it, I one day decided I was sick of being up to my eyeballs in consumer debt and took action to fix it. It took several years but I made a plan and got myself out of the situation.

The solution was me taking responsibility for my life. I had to correct my attitude/mindset around money. Privilege didn’t do that for me. I did.

So whether you grow up poor or wealthy or middle class, your mindset is the thing that will either do the most damage or cause the most benefit to one’s situation. A lot of poor people inherit the “poverty mindset” that keeps them in the paycheck-to-paycheck cycle and they never break out of it. Similarly, a lot of wealthy people inherit the wealth mindset that makes them more likely to do things like start businesses and actively look for new investments etc.

It’s true that privileged people seem to have a “head start” financially, but one way or another we all have lessons to learn and we can choose to embrace them or we can hide our heads in the sand and pretend everything’s fine. I learned my lesson about money through irresponsible consumer spending/debt accumulation, and I guess my privilege actually kind of helped me to do that.

Not all privileged people turn out to be failures and not all poor people turn out to be successes. Nothing is ever black and white. But what this article strives to get across is that just because you are born poor, doesn’t mean you’ll doomed and just because you’re born rich doesn’t mean you get to coast through life.

It’s all about perspective. You can see your situation as an asset or disadvantage, and that ultimately determines where you end up.

I agree 100%, privileges do make you soft. I remember when I came from a small town to Moscow, Russia. Moscow is a tough city, I tell you that, and if you are not willing to fight, you will be left behind really quick. I had a friend, he grew up in Moscow, his parents had a business and financially supported him. A week after I came I found my first job that paid $300 per month, at that time the average monthly salary was $550. And he told me “I wouldn’t take this job, it doesn’t pay much” Year after I was making $1000 per month and he was still sitting idle doing nothing.

When I came to the States I didn’t speak English, didn’t have money or job and some people told me, ‘You don’t need to bother, just apply for welfare, take your time and you’ll be good’. So, 4 years after they are still sitting on welfare, doing nothing and receiving money from the government.

I can’t say I grew up poor, but my parents taught some good lessons about working, “fighting,” and not giving up.

That’s a really good example of learning how to fend for yourself. The people who choose the tougher road and become independent ultimately get rewarded. Like the saying goes “a road with no obstacles probably doesn’t lead anywhere.”

I’m totally fine with people who want to live a more extravagant lifestyle if they EARNED that money. BUT, to not be able to see how other people can live on 30K is someone who’s completely gone soft and lost all perspective. There are millions of people all over the world who live on less than $1 a day. Might be good for them to get out of their fairy tale castles, once in a while, and see how the rest of the world lives.

I know plenty of underprivileged people who remain underprivileged and have been for generations. The data does not support the premise that lack of privilege breeds happiness or success, in fact it supports the opposite.

I grew up poor and am no longer poor, but my sibling and parents still are. I think there are many more variables at play than the influence of privilege, but I do think it is easy to get used to more luxury and I do understand why this is the story you are telling yourself about how the world works now but the data and social science research is not behind you.

You do have a right to be proud of what you have accomplished, but you are a statistical outlier like me and you likely had some other factors at play imo like academic ability and cultural expectations. I agree your background gave you a lot of motivation and you are doing well, but we’ll never know what you would have done financially or emotionally with extra support and the freedom to pursue a different path. My guess is quite a lot with less anxiety/depression and black & white thinking.

I also think the three generations theory is pretty flawed because you are comparing the underprivileged to the 1%, not to the middle and upper middle classes. Kids from well-off families do end up better off financially and the gap is widening generation after generation.http://prospect.org/article/wealthy-kids-are-all-right

“Indeed, a large body of literature has focused on the relationship between childhood poverty and short and long-term outcomes in childhood, adolescence and adulthood, and also finds negative effects on social, health, and educational outcomes. Children experiencing early poverty, deep poverty, and persistent poverty are especially likely to experience deleterious longer- term effects on their development and life circumstances, such as an increased likelihood of economic hardships in adulthood. In fact, several
studies indicate a strong intergenerational connection, with poor children much more likely to grow up to be poor themselves.”

“It’s getting more extreme. According to Stanford University researcher Sean Reardon, the achievement gap between high- and low-income families “is roughly 30% to 40% larger among children born in 2001 than among those born 25 years earlier.”

In addition, the idea that well-off loving, supportive parents that do pay attention to their child’s feelings are creating dependent lazy kids is flawed. I’ve noticed that parents that are emotionally in tune with their kids and have time to spend with them due to greater economic freedom often have pretty nice kids and lots of them are encouraged by their parents to have jobs and work hard along the way at the same time. What seems to work is when a parent is authoritative, but not authoritarian or permissive.

My point is that everyone who grew up poor isn’t doomed and everyone who grew up privileged doesn’t get to coast through life.

Which means if you grew up poor, you shouldn’t just throw up your hands and say “that’s it, I’m doomed, what’s the point”.

Perspective does make a big difference. We’ve seen it over and over again. Even people who’ve lost EVERYTHING (entire families) during the holocaust build their lives back up again. Everyone has a choice. You can sit there, like a lump, and say “this doesn’t apply to my exact” situation and give up, or change your perspective and do something about it. It’s your choice.

I think everyone knows that people can move up economically from poverty and those who are not living in poverty don’t just coast through life. You are speaking in bumper stickers.

I agree that changing glasses is a really good skill to gain. That can be taught to a certain extent, however, you’ve not done the research you need to to understand your question as to why you are FI and others from poverty are not – instead you try to explain everything from your internal reference points that are not statistically reliable. Like saying the world is flat because it looks that way to you and everyone knows it.

The research strongly shows the childhood poverty normally creates less resilience, not more. Those that do overcome poverty by their own efforts show greater than average resiliency.

Research also shows that the most important factor for resiliency is at least one stable and committed relationship with a supportive parent, caregiver, or other adult – but there are lots of factors, including personality.

Kids that are really resilient demonstrate good problem solving skills from an early age and the ability to delay gratification. They also demonstrate higher autonomy and androgeny – ie. less typically gendered behaviour and a belief they have a degree of control over their environment, often gained through academic or social success.

Any of that sound familiar? Might help you understand why you overcame hardships, assisted by a (likely) genetic proclivity for saving reinforced by your circumstances, while others don’t naturally follow your path.

Oh wow, I had no idea you were a professional psychiatrist. That is a lot of random, pointless statistics. Saying that your genetics and personality is largely responsible for where people end up is the exact the type of thinking that holds people back.

I did not say that, nor does the research support your takeaway so I’m guessing you did not read the studies. The fact that you find peer-reviewed research on point to be random and pointless without reading it vs. your own opinions should be a bit of alarm bell.

I’d be thinking, “well, the research strongly supports that childhood poverty, in most cases, creates a lower ability to cope and succeed in life, why did I do better than what I started with?”. You’ve kind of done that by saying you believe attitude is everything and your poverty gave you all sorts of strength, but that doesn’t seem to be true for most.

What the research says is that there is a correlation of 35% re. saving/spending behaviour being genetically influenced. This was arrived at doing research on twins separated at birth. They end up with statistically correlated spending/saving patterns despite very different upbringings and life experiences. And there are lots of studies showing that risk aversion is partly genetic.

The research says genetics, upbringing AND mostly, life experiences, are behind attitudes and behaviours. Someone coming out of poverty is coming from disadvantage, not advantage, and those that succeed probably are often likely to be more of the planner/saver/problem solver types who had a positive early adult influence and experienced early success with something.

It is not just an effort of will to overcome adversity, or everyone would be successful starting from the same point given the rewards of doing so. I do agree most people can better their circumstances through attitude and strategic thinking and personal growth and, for children, having an adult invested in their well-being.

Also, not a psychiatrist, never mind a “professional” one, but I do have a (very dated) background in social science research.

Research this and research that. There is literally a research study that supports anything. The insights and experience of a person who ‘has been there’ are 1000 times more valuable than any research study can tell me.

Ok in defence of firecracker…..when she says privilege makes you soft, she isn’t saying that being wealthy dooms you and being poor catapults you to success and happiness. Just like when she says if you buy a house u r a house horny idiot doesn’t actually mean every single person purchasing a home is an idiot. Indigo you have lots of valid points, but try not to get lost in data and details, try to see the underlying ideas and expressions. Certainly we are not going to all agree with every viewpoint, but how boring of a blog would that be if we did.

Excellent, fact-based response. The examples I’ve seen in my life more support the studies you linked to.

I grew up as an orphan and am now a 1 percenter. But I consider myself an extreme outlier. I know plenty of people who grew up much more priveleged than me, got a huge head start, and are far far more successful and arguably more well-adjusted. I still bear trauma from the tough years.

I like your main point — ‘what doesn’t kill you makes you stronger’. (I really hate the phrase but the idea resonates strongly with a lot of people)

I had to grow up with some obvious physical issues which required me to be a flexible problem solver (but probably stunted my social skills … and lucky for me I had a mom who helped offset much of it). Perhaps many FIRE folks had to deal with significant adversity during childhood?

Also, I grew up middle-class but watched my parents go through a VERY tough period (financially and otherwise) when my dad lost his job and couldn’t find a new one for several years. So did my 1.5-year-younger sister.

Now, 20 years later we are such opposites! I took that experience as an object lesson in what NOT to do financially. She didn’t seem to notice. I have always been the unconventional one (likely due to my physical issues), which seems to have made it easier for me to live below my means (I didn’t have to keep up with the Joneses, for example). I had a brief period of unemployment in the 2000 tech crash but my household was set up to always be able to make ends meet on one income. My sister was financially crushed in the US housing crash (interest-only adjustable rate mortgage), always keeps loads of CC debt, etc. … basically, she’s a normal American consumer and continues to make poor money choices to this day.

Maybe the adversity I had to face in life helped to offset the financial privilege I have. In theory, my parents could help bail me out if I ever run into financial difficulties (they have bailed my sister out multiple times), but that becomes increasingly less likely the closer I get to FI. 🙂

Anyhow, enough rambling! Thanks as always for giving us something new to think about!

“Maybe the adversity I had to face in life helped to offset the financial privilege I have”

Your are absolutely right. I talk about financial obstacles, but in reality obstacles can come in many forms. And it is these trials and tribulations that help build character. In your case your adversity helped you become stronger. So kudos for seeing it as an asset rather than a hinderance.

My husband, whose family has been here for generations, thinks I’m over the top. And I do love that my son is secure and content. I just wish he could have that *and* a killer instinct. Maybe a fighting instinct, anyway.

That whole 3rd generation thing is really interesting to me and I can definitely see the truth in it. I’d consider my wife to have had a privileged upbringing, with having everything she can possibly want given to her until she left home. I think her father is quite wealthy (somewhat stealth wealth) but he never really lets on about the state of their finances so it’s hard to tell. I can definitely see how easy it is for one successful generation to not pass on the same traits to their children as I don’t think my wife has learned any financial savviness from her successful parents.

In some cases it’s almost like you end up opposite your parents. If you grew up poor and needy, you’re more inclined to try harder to succeed. If you grew up spoiled and fortunate, you think it all comes easy and put in no effort.

I think it’s largely dependent on opportunity, though, the more opportunity you have, the more likely you will break the cycle.
For example, if you inherit a ton of cash from your parents it’s pretty easy to spend it all. If you inherit a successful business or a huge real estate portfolio, there isn’t as much opportunity to blow it. The same works in reverse, if you grew up in absolute poverty with little potential to learn and grow, you’re still going to struggle to break out. If you grew up poor in a wealthy country though, you have a lot of opportunity to break that cycle. You were somewhat fortunate in that you ended up in Canada, opportunity aplenty to break out.

Luckily I probably grew up closer to the “poor and needy” group, which is largely why I think I want FI.

I wonder if children of FI parents are less likely to succeed in that case? I think the moral of the story is to be rich but act poor, then your children will have the best of both worlds!

I don’t think that the children of FI parents would be less likely to succeed since a lot of the FI people would need to be somewhat frugal in order to maintain FIRE, a lot of FI people would be rich on paper but not able to blow money on expensive luxuries but make up for that in also being rich on time. That means FI parents wouldn’t be spoiling their kids giving them everything they wanted and FI parents would be able to invest more time into their kids to pass on their values and help them succeed.

True most FI people tend to be frugal but then again what does a child learn from seeing both their parents not working their entire life? Most children won’t see or are too young to remember the years of slaving away by their parents to actually reach FI. If they are never fully taught the complexities of FI and the insane amount of effort that was undertaken to get there, they might think life is pretty straightforward and become complacent.

You make a good point in that the parents would have all the time in the world to instill the traits that brought FI to them though.

” If you grew up poor in a wealthy country though, you have a lot of opportunity to break that cycle”

This is absolutely true. That’s why I don’t get why (unless people are sick and disabled) people in first world countries can’t break out of poverty. It’s so much easier (not saying it’s easy but easier) to so in Canada than in 2nd or 3rd world countries. If immigrants can do it coming to this country with NOTHING, and the inability to even speak the language, what is preventing them from doing it? Is it lack of perspective? Cultural differences?

That’s why I don’t get why (unless people are sick and disabled) people in first world countries can’t break out of poverty.

Why do you think that no Canadian-born person “breaks out of poverty”? Is it your definition of poverty (i.e. no one in Canada fits), or just that you haven’t gotten to know any (to your knowledge at least)? Just a suggestion, but chances are you actually know a few and just don’t know it as it’s not the kind of thing one tends to share much…After all, people do tend to get SO judgmental on the subject…

Poverty as defined by the person themselves. People who consider themselves poor, but can’t improve their situation. Is it a lack of financial education? Lack of motivation because other “lucky” people make it? Using “judginess” as an excuse not take action?

Bravo! You consistently make Mondays more badass, but this one is up there with some of the classic MMM rants, imho.

This is exactly what needs to be said, and exactly what a lot of people don’t want to hear. It’s not about class warfare or any nonsense like that, it’s about the simple truth that doing the harder, better thing makes you a harder, better person. Those of us that grew up without that safety net didn’t have a choice, but I’d say that voluntarily making the harder, better choice even when the softer, easier option is a possibility, makes you even more awesome. So don’t worry, friends that grew up rich, you can still join the badass party! Just read some of the Stoics to catch up, maybe. 😉

Wow, that’s high praise. Thanks! I definitely subscribe to MMM’s school of badassity. It’s much better see adversity as an asset rather than complaining about how much better other people have it. One gets shit done. The other accomplishes absolutely nothing.

Sorry but everyone who is born in the developed world in the past 50 years is privileged … our standard of living, even those of us who sacrifice and scrimp and save, is the best in human history.

FIRE, I wonder what all the hard working locals in the developing countries you so often visit think about the two happy tourists from Canada who were privileged enough to retire at 30, earning first-world incomes (albeit for only a few years) and living a life of leisure made possible by spending it at 3rd world costs? I think ‘soft’ is relative.

Yes, exactly. I was one of those “3rd world people”. And now I can help them by bringing money to their economy rather than taking up someone else’s job in a first world country that I don’t need. So all those hard working locals are enjoying it just fine, thank you very much.

Fighting through adversity helps make you stronger. I loved reading about you looking through the dump for a new toy to play with. I grew up with severe asthma and still battle it now in my late 50’s. I decided to work on my diminished lung capacity and started running at age 14. Ran an ultra marathon (50k) at age 17. Had a very active life while dealing with many health adversities. 5 years ago I ran 100 miles in under 24 hours still needing 3 breathing treatment breaks to get through it. If you get a chance watch The Barkley Marathons on Netflix. The most difficult race on earth. If you can’t watch the whole thing just watch the last 10 minutes as the lessons about overcoming life’s hardship are profound. We really do have it easy in this country, we are soft!

Well, no one really knows what it will be like until they actually become parents. But basically two things are the most important to me:

1) raising them to pull their own weight and provide value to the world.
2) see adversity as a character building rather than a liability.

One way to do this is, instead of just buying them what they want, get them to figure out a way to earn 50% of the cost. I will put in the other 50%. This will motivate them to figure ways to earn the money.

I also would like them to get part-time jobs or volunteer in the summer. And it won’t be about earning money, it’ll about developing grit. They shouldn’t get to coast through life until they’re earned it through hard work. Or if they find some smart (and NON illegal) way to build a business and get there faster, that’s fine too. 🙂

Hi, I find your blog to be mostly pretty good. I was wondering to what degree would even constitute poor.

By some standards I grew up poor, my parents worked 4 jobs between the 2 of them and we constantly shifted apartments. However, I don’t view myself as being particularly poor. I mean, my relatives back home I think were much poorer (hence why a lot of money my parents earned went back home).

In my own situation, I relate to a lot of what you’re saying. In fact I went to the same university as you did and know plenty of other Mathies that were/are in a similar boat. My wife and I put away about as much as we can towards retirement but we are trying to break the cycle. Currently we pay about 1/4 of our after tax income to our parents to support their day-to-day expenses and if we have any kids we don’t plan to be in a situation that they would need to support us.

The other thing really that I’d like your thoughts on are regarding the other side to all of this. Certainly the things your raise about growing up poor can be true. But there are A LOT of very poorly educated or unmotivated people that really don’t understand finance and really have a very limited capacity to improve their financial position. At the end of the day, nothing guarantees a good outcome when it comes to raising a human. But personally I think that if I were to play the odds, I’d rather a well-off starting position than a poor starting position.

“But personally I think that if I were to play the odds, I’d rather a well-off starting position than a poor starting position.”

Right, so if that’s not something you were born with, just give up? Overcoming poverty is never easy, and at the end of the day, not everyone will be able to do it. But choosing to see it from a different perspective rather than “woe is me” helps a lot. We don’t get to choose where we start, but we do have control over where we end up.

I grew up privileged. At least I thought I was. I had two parents who loved each other and us four kids. My dad worked at a menial job, made just enough to support us thanks to my moms ability to budget, grow food and sew cloths. My mom eventually went back to work part time as us kids got more expensive. We all learnt that getting a job at 14, after babysitting a couple years, was awesome, gave us our OWN money. We bought our own first car, paid for our own schooling, and never had one penny given to us to buy a house. But I grew up happy and privileged. Looking back through adult eyes, I can see we were a low income family. Both my parents worked hard to give us what they could. They instilled values in us that made us see what a privileged life really is.

I’ve seen you bring up the very important concept of perception several times now. I truly beleive this is the key to living a fruitful life, whether you are poor, privileged, or otherwise. You can actually choose how to view your circumstances and it becomes a reality for you. Sure, it’s a bit philosophical, but Suzq’s comment is a great example of creating your reality through developing a certain perspective.

In regard to financial Independence, developing a perspective that values freedom and experiences over stuff is necessary for those of us who were not born in to a ton of money. Perhaps what you are trying to get across is that those who were born into money may have a difficult time developing such a perspective.

Following your logic, truly poor kids would tough it out working no matter what, even if they don’t like working or if their health is being impacted, right?

Also if kids see that their parents are always traveling and not have to work, will they have the motivation to go to college or pick the “right” major (mom and dad have enough to travel, should be enough for me too)? Will the parents be able to successfully not hand their kids a life of privilege?

I’ve seen a lot of counterexamples to your premise on both sides (kids born to underprivileged parents continuing in a life of poverty, kids born to privilege living well-adjusted, successful, caring lives), so I don’t believe in generalizations. I think poverty begats poverty may be more the norm.

You’re right. For every example there is always a counter example. But do people automatically think “hey what’s the point of getting married? 50% of marriages end in divorce anyway!” Then no one would ever get married.

The same with poverty. If you assume you’re going to fail in life because you’ve been dealt a bad hand and “what’s the point”, then “poverty begets poverty” is a self full-filling prophecy.

When one gets down to the fine details, it’s quite interesting to contemplate how much of “success”, be it financial or otherwise, is practically pre-determined (in North America) by genetics – personality and IQ – things that which we have no control over.

For example, it’s better to be born poor with a high IQ than it is to be born rich with a low IQ. By the age of 40, the high IQ person is better off – happier, more stable, better job, etc.

How we think and interpret information, and how we act on it, is a function of our brains. We’re all born with brains with different capacities and dispositions. The mitigating factor is environment, which plays a significant role. But even if we keep that constant, there will still be a massive divergence between individuals because our inbuilt IQ, personality, and interests differ.

I always envied the rich kids I grew up around but I used that envy to motivate me. Perhaps it would destroy other kids, or have no impact at all on them. Yet I had no choice but to be motivated by it. I just was.

All that aside, I wish I was born showered in riches so I could waste lots of it on toys and girls (like Dan Bilzerian), but I’m also content with the level of success I was compelled to achieve.

“but I’m also content with the level of success I was compelled to achieve.”

Yay! You win at life 🙂 This is what sets apart people with perspective and people without. I always find it odd that there are people who grew up poor, works hard and makes it ,then still get jealous that they didn’t make it even harder (since there are people who are even richer). This type of person will never be happy, no matter how much money they have.

One could argue that what you refer to as “soft”, others would refer to as “unwilling to sacrifice” and I believe there is a difference. As you might remember from other comments I’ve left on other posts, I grew up quite privileged (but not spoiled) and I am now FI and semi RE with a spouse that is full FIRE. We didn’t have high paying jobs (only making between $28k-$45k each over the years) we just budgeted really well and lucked out with the housing market boom.

One thing I was never willing to sacrifice was my free time. I worked part time most of the time and always declined full time hours and overtime during the busy season at my job. When I got laid off and had to find work I found a place close to home that was a 5 minute commute even though I was offered a job through family connections that paid 20% more but was a 40 minute commute. I was willing to miss out on a lot of opportunities to make money simply because I wasn’t willing to sacrifice my free time to do so and I’ve always been of the mind that you could slave away working your ass off in school or at work, not enjoying life at all and get hit by a bus any day and it would all be for nothing. My life was comfortable enough that I was willing to continue on as I was instead of pushing myself to pay my mortgage off faster. I made a lot of decisions based on convenience.

“Soft” implies that the person would be unable to live without certain luxuries but it is more that they would rather not and are willing to pay for them even if it means having to work in order to pay for them. People who live in poverty and have to claw their way out of it don’t have the luxury of saying “no, I’m comfortable with where I am and I’ll continue on this way because I’m fine” because poverty isn’t comfortable and you are in a fight or die situation and you might as well be uncomfortably working your ass off and getting out of it rather than uncomfortably living in squalor forever. That’s not to say these privileged “soft” people would be incapable of making such sacrifices, they just have the luxury to choose not to. Sure there might be some really pathetic sad sacks who would have mental breakdowns if they weren’t able to live a completely pampered lifestyle but I don’t think that applies to most people, I think when push comes to shove most people will adapt and do what they need to do.

I personally don’t get why people need to live extravagant lifestyles and why they’re willing to rack up debt or work their asses off to maintain it but to paraphrase a quote from Charisma on Command “it’s a good thing that you make choices for you and I make choices for me because if it were the other way around we would both be very unhappy”

I’ve also had to push through engineering exams in university. I remember the day before my thermodynamics exams I had a massive fever and tried to ask the professor to write it at a later date. He just laughed in my face and I was forced to take it with everyone else. I passed, but only by a little. I think this made me a tougher person in the long run- to just do something instead of complaining about it.

But I do think finding balance is key for a healthy mental state- sometimes we do need to hear each other out to get through the tough times. Like actual hard times though, and not that the rain outside is making your life “miserable”.

You saved and now living a frugal life. But others do the same in a different way, they feel so Privileged that they deserve to live off the State. State money and the benefits of truly being classified as poor last a lifetime. They live frugal, you live frugal, but they’d have a difficult time wondering why if in the end you were going to live frugal, not work or sort of “do your own thing”, why waste all that time getting a degree, saving a million dollars when they have what you have except their money and benefits will last forever. In their mind, you are the dumb one. They are living frugal and doing their own thing all on everyone’s money, not their own which they have to find very smart indeed.

So Privilege comes at all wealth levels. They don’t care about travel or where they live or the conditions in which they live – they care about free time… doing their own thing like you.

My brother does this. In every way imaginable, he finds a way to collect from the State. He says he is happy “doing his own thing” on everyone else’s dollar and when he feels like it, he takes a side job for cash.

Collecting from the state is not a reliable “retirement plan”. At any time that plug could be pulled and then you’re screwed. Anyone who relies on their job, the state or anyone else is always at the mercy of someone else.

* Anyone who relies on their job, the state or anyone else is always at the mercy of someone else. *

Very true! I couldn’t agree more on that! jobs, parents, government ?(haha) are all just temporary solution until you can become financial independent.

In my opinion, @FIRECracker, you are a true inspiration to me, because you are able to make money while doing things you enjoy and care about. and still have the time to travel the world. One of the great accomplishment in life is when you can influence others to become successful. and you are doing just that!